Analyzing Xiaomi's Business Strategy in the Context of Trade Conflicts

This report offers a detailed business analysis of Xiaomi, a Chinese electronics company, focusing on the impact of the US-China trade war. The introduction provides an overview of Xiaomi's establishment, product range, global presence, and business model. The main body delves into a brief description of the trade war and its implications, followed by a comprehensive business analysis. This analysis examines three key factors: political (trade policies and instability), technological (advancements and competitive landscape), and legal (regulations and patent issues), and how they affect Xiaomi's operations, especially its potential new subsidiary in the USA. The report highlights the challenges and opportunities Xiaomi faces due to these factors, emphasizing the importance of adapting to the evolving international business environment. The report also discusses the potential effects of these factors on Xiaomi's new subsidiary. Finally, the conclusion summarizes the key findings and implications of the analysis, offering insights into Xiaomi's strategic considerations amid the trade war.

Context of international business.

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Brief description of US - chain trade war...................................................................................4
Business analysis.........................................................................................................................5
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Xiaomi is Chinese electronic organization founded in 2010 by Lei Jun in Beijing, they
make and invests in mobile applications, bags, smartphones, laptops, earphones, fitness bands,
trimmers and many other products (Greeven & Wei, 2017). It is youngest firm on fortune global
500 list, they released their first smartphone in 2011 and continuously gained revenue as well as
market share in china that help to become nation’s biggest smartphone organization. Xiaomi is
the world’s fourth largest smartphone producer, lead in largest market, India and biggest market,
China. It developed board range of customer electronic goods, including smart home device
ecosystem. In china, Malaysia, Singapore and India organization has 15,000 workers. They
expand their business many nations effectively including Philippines, Indonesia and South
Africa. Recently company named one of the qualified candidates for virtual bank licenses in
Hong Kong (Lun & Yazdanifard, 2014). They introduced Xiaomi Mi 9 phone which come with
new technology that is fingerprint scanner. It is considered as second products of this brand with
different technology available in market. They see hardware sales as means of providing services
in long term and delivering software. Firm is internet organization with smart hardware and
smartphones connected by LOT platform as their core business. With vision of being coolest
business and being friend with their consumers, Xiaomi is devoted to constant innovation, with
unwavering centering on efficiency as well as quality (Rambi, 2015).
They relentlessly build their amazing products with honest prices to let every consumer in world
enjoy the best and better life through creative technology (Shih, Lin & Luarn, 2014). Currently,
firm goods are present in more than 90 regions and nation all around the world, company have
top position in many markets. Business achieve strong and high growth across all business
segments. They continued to shine even in face of high competition from international and
domestic peers with powerful and unique business model. It is considered as china-based
investment holding firm principally engaged in development, research and sales of smartphones
(Yang & Ma, 2016). The organization mainly conducts their business with the help of four
segments. First segment is smartphone that engaged in sales of products, second one is lifestyles
and LoT goods segment that engaged in sales of other in-home products, including laptops, smart
television and artificial intelligence speakers. Third segment is internet service that engaged in
provision of internet value added services and promoting service. The last segment is involved in
facility of repair services for their hardware goods. The aim of business is to regularly exceed

expectations through innovation in hardware, services and software. Xiaomi smartphone
shipments for India sustained to demonstrate powerful progress momentum and reached number
one market share position. Organization reach at international market, with continue to work on
fundamentals, reinforce their abilities in innovation, supply chain management and strengthen
quality control strategy (Casanova & Miroux, 2019). Accordant to market investigation global
data corporation, organization is placed at fourth biggest position in world where they gain high
amount of profit and generate revenue rather than before. Xiaomi expand outside of home town
with their first international headquarter in Singapore where they operate business efficiently
(Bhatnagar, 2019).
MAIN BODY
Brief description of US - chain trade war
Trade war is economic issue resulting from extreme protectionism in which state create
and raise tariffs against each other in response to trade challenges developed by US. US and
China trade war is ongoing economic problems between both nations. In newest development in
trade dispute between United states and China, the Trump management announced delay to
newly planned 10% tariffs on another $300 billion of Chinese products. The president began
setting trade obstacles on China with goal of pressuring it to make modifications to what US says
is unfair and unequal trade practices. Among those trade activities and their affects is increasing
trade deficit, forced transfer of American technologies to China and theft of intellectual property
(Wisner, Tan & Leong, 2014). The president of US supported tariffs to reduce trade deficit, they
promote domestic manufacturing saying nation was being ripped off by their imposing tariffs
and trading partners became major plank of their presidential campaign.
The trade war impact on farmers in US as well as manufacturers of products, in other
nations trade war between US and China caused economic damage, on the other hand some
countries get benefited from maximizing producing to fill gaps (Seabrooke & Wigan, 2017). It
criticized all over the world, including by US agricultural companies and businesses, however
most farmers continued to help Donald Trump. China replies, threatening their own tariffs of US
products, stating that United States launched a trade war. Export and import markets in number
of countries feared charges would interrupt supply chains that ripple around the world. In US,
trade war brought difficulties for manufacturers, it increases prices for customers. Recently US
release their new regulatory guidelines for their telecom networks process to secure telecom

networks from national security threats. US and china are key players in world, but their
relationships are now under threat, china reactive tariffs cover different categories of copper
waste, scrap metals and other secondary resources including recovered paper as well as fiber
from recycled cardboard and paper in US, all applicable materials for circular economy. Trade
war between china and US is current ongoing trade war that impact on overall productivity of
business in both nations, it decreases the profitability of local business as resulting decreasing
profit margin rather than before. The relationship between both countries were changed forever
when China Joined WTO. The world bank adopted plan to help china with $1billion to $1.5
billion in low interest credit annually. Due to trade war between both nations, Donald Trump
president of US called for WB to stop their loaning money facility to china. It is considered as
latest conflict of this trade war that impact on growth and prosperity of China. The pressure feel
by china through US is highly affecting the current statues of nation, due to trade barriers created
by US businesses in China as well as large companies cannot be able to expand their enterprise
effectively in another place. Both countries were locked in bitter trade war, over passing year,
world’s two biggest economic obligatory tariffs on billions of dollars’ worth of one another’s
products.
Business analysis.
A) three factors most relevant with company at the time of trade war:
Political factor-
It is activities related to local and national government policies & regulations that have
impact on most business. Political instability and stability, regulatory shifts and new legislation
that will have substantial impact on how companies operate in existing or new market. Due trade
war between China and US, any organization cannot be able to enter into both nations easily,
they has to face many difficulties that impact on its business growth and success within existing
market negatively (Yefremov, 2018). Xiaomi is a Chinese company when they will open its new
subsidiarity in USA organization has to face many issues during trade procedure because of new
trade policies after trade war between both nations. Ongoing trade war with USA affecting
company shares negatively, government do not allow business to open new subsidiary in USA,
the financial market and global supply chain is also affected due to this war. Major sales support
to Xiaomi organization comes from outside of nation such as USA amounting to more than
billion (Trappey, Trappey & Wang, 2016). So political instability in this nation after trade war

directly affect business position negatively. Trade war between both countries, create barriers for
company which they cannot be able to remove in their way towards opening new subsidiary in
USA, it might be decrease its wage growth. This factor is highly relevant to firm by highlighting
the situation and results of trade war, that band opportunity for China companies to enter into
USA. Company has to deal with issue and trade barriers when they want to open subsidiary in
2020.
Technological factor-
Stakes of information technology keeps higher as compared to other sectors when it
comes to gaining revenue. The organizations who earned well, innovated with time and Xiaomi
is no doubt one of them. Technological advancement provides the many benefits to company as
sustain in market. Organization is well known for their innovative products and range of Phone
as well as their gadgets, they also recognized for their stunning concept of design, they created
most attractive and finest designs for its products that business contemporaries cannot match. It
is tech giant so company is bound to be affected by technological modifications (Kushida, 2015).
Xiaomi is losing their position to Google in list of world’s valuable brands. Growth in mobile
technology drive sale of company rather than before. By applying different technologies and
advanced features in their products organization will gain competitive advantage within market
place effectively. Due to technological advancement cloud computing demand is growing more
and more which is quite beneficial for business as it is one of the best opportunities to grow firm.
By offering cloud services to limited extent. With support from organization corporate structure
by developing expanded cloud structure firm increase profitability of business in providing this
service (Xu, 2015). Along with this, technological advancement creates competitive environment
within market place where competitors adopt the same technology for their products which make
negative impact on growth and revenue of business rather than before.
Legal factor-
It is external factors which refer to how regulations and law affected way businesses,
perform, managed and consumer behave. Profit margins, product transportation, viability of
certain markets is examples of things which get affected by legal factors. Regulations and rules
are leading challenged before any business, obedience is absolutely important of business profits.
Xiaomi is facing some legal issues in their nation, as it had negative impact on brand as well as
its perception on mind of consumers. (Khan, Alam & Alam, 2015). Without considering laws

and essential regulation company cannot be able to sustain for longer within marketplace
effectively as it decrease it financial performance rather than before which is not good for brand
image. Flagship products of company that is Ml 5 plus and Ml 5 been accused patent
infringement by company known as blue spike LLC, a organization which is belonged to US.
The claim is established into grounds that Xiaomi developd address space layout randomization
software which they offer service of it into United States market (Badiangsie, Lapian &
Tumbuan, 2019). This legal element is threat that will impose expensive regulatory compliance
needed and more limits on firm. Along with this organization is facing some legal barriers
related to their policies and practices on after sales services as well as other areas of company.
For example, organization is halted to advertise their products in US and India after Ericsson.
In above analysis it is clearly mentioned that technological advancement, policy changes
after trade war between USA and China and laws are the three factors that impact on Xiaomi
organization when they will move to USA.
B) how those factors affect to company new subsidiary
The above mention factors are most relevant with company at the time of trade war. This
can create various issues for company Xiaomi company. These issues are related with about
mentioned factors. The trade war is an economic conflicts which have resulting form the extreme
protectionism in which states raise or creates traffic or other trade barriers against each other in
the workplace (Cai, 2016). The issues by accepting those laws and advanced technologies. Affect
of those factor on Xiaomi company's new subsidiary at workplace are described below:
Effect of political factor on new subsidiary of Xiaomi company:
For the multinational companies, the political factors is creates political risks which
refers to the risk that a host country will make political decisions which proves that the adverse
effects on corporate profits or goals. The political climate of US and china is improves which is
based on current developments and escalation of a trade war between the two countries. Tjhat
seems that is going to be a problem for companies (Gupta & Dhillon 2014). The adverse political
actions like destruction due to revolution, financial nature like creation of laws which are
prevented the movement of capital. On the other side, instability is always affecting investment
returns could stem from a change in the government legislative bodies are affects to company
Xiaomi. Those affect to company when they move to USA country. The political factors have
affect to business and for its growth factors by creating and refers various government policies

for company in an effective manner. Those new policies have to be follows by company for
developing their new subsidiary at market place. The company have their various sub brands and
subsidiaries like oppo, vivo and one plus. The political factors is affect to that because this
considers various government legislations (Harwit, 2014). The tax like income tax, services tax
and sales tax are those taxes which have to paid by company for managing their effective
performance at workplace in effective manner.
The rate of income tax is increased then it affects to company in negative manner because
in that company had to pay extra amount which is decrease some % of profits margin of
company Xiaomi. On the other side, if that is decrease then creates profits for company because
in that case company pays lower amount of tax amount (Isaacs, 2015). The new subsidiary of
company is also affected by political factors in case of trade restrictions. This means that is an
artificial restriction on the trade of goods and services between two or more countries. In that
case political factor is affect to Xiaomi company and its new subsidiary because with that
company have not any chance and permission to open and introduce their any other branch with
new product in particular company at their they are restricted. For example: at the time of trade
war have restricted with US because of some issues. Through that China and US both the
countries not able to make business relationship and do any business in particular country. As the
type of trade restrictions are and will affect to Xiaomi and its new subsidiary business.
Effect of new and advanced technology factors on Xiaomi company and new subsidiary:
The technology is more advanced which affect to business and their performance. In the
smartphone industry a competition is too high, in the market place have various kinds of phones
and with new features (Kim, 2019). This creates the biggest competition between more
companies and customers are also goes with higher quality of phone that have the best features
and technologies. This creates more effectiveness for works by using technology in effective
manner but not in use then create negative impact on company and its subsidiaries. The Chinese
brands, on the other side, more improved the channels front with new experiments (Kogut &
et.al., 2018). This creates negative impacts. The technology advancement is gives directs impact
on the company because that is more advanced at market place and most of the companies are
use those technologies for improve their performance.
The technology advancement is helps to research and development. This helps to
promote its products. Research engine is the best technology which is helps to done proper

research about the market needs and wants with Xiaomi company. In that company can use
search engine to collect data about market needs, if company is not use this then it can affect to
company and its new subsidiary because without knowing needs and wants of customers product
launches is not right ways to work (Kwan & Chiu, 2015). This creates more issues for company
and for its growth factors. The company wanted to open new subsidiary in 2020 in China which
is affected by technology because technologies are more changed at workplace and in the market
place. This can create negative impact on business at China's market place because company
need to do research on China market by using search engine technology.
On the other side, technology shortage of the ecological chain companies is affects to
business in negative manner. This creates negative impact on the business with that company can
faced problem which is supply chain management (Li, Jia & Du, 2019). In order to develop high
products and services in new subsidiary, the Xiaomi company need not only a more advanced
technology but also a better branding strategy which is managed by using proper supply chain
management. At the new marketplace company needs various raw materials and some material
only at their client country. In management requires to export those material and sample of
phones at China by supply chain management. On the other side, manufacturing products could
be helped to company to promote its production in short time and its essentials way for an early
stage company (Newman, 2018). However, developing this creates barriers for a company to
develop high end products. By research and development of technology innovation. Through that
technologies can affect to Xiaomi company and its subsidiary which is management will
launches at China in 2020, because every country have their own technologies for managing
supply chain and research market.
Effect of legal factors on Xiaomi company and its subsidiary in China:
The subsidiary company is the company which has been owned by company at other
place country with new and innovative products at marketplace. Xiaomi company is directly
impacted by a set of legal factors such as trade regulations, anti trust rules and regulation, data
protection act, intellectual property rights, China government rules and regulations and others
(Peng, 2016). In addition to that laws related to employee health and safety, consumer protection
laws, employment laws and competitive rules and regulations. Changes in these rules and
regulations are most likely to impact Xiaomi company performance in direct and indirect manner
and another ways that are difficult to predict. The every country have their own rules and

regulations which can affect to Xiaomi new subsidiary at Chin in negative and positive manner.
This explores in below:
The company is operated their new subsidiary branch in China, in that case company hire
employees also from China (Shaji & Soman, 2017). In that company is affected by the
employment Law of China and company follows US employment laws which are little change,
in that if company is hire employees from china then it creates more effectiveness and this
creates advantage for company because their people have idea about rules and regulations. China
employment laws is basically involves various factors and such issues as employment contract,
remuneration or safety, labour disputes and working hours or other legal responsibilities the
employer follows. There employment law is included a very strict termination's system in case
any misbehaving and losses. This can affect to Xiaomi company because they are not had act
which follows termination of employees in any mistakes. They give chance to solve and correct
their mistakes in regulate manner (Suwandhini, Suwarni & Usman, 2019). This affect when
employees done mistake and employer have to take decision to terminate employees from
company. This gives negative impact on company and on its China subsidiary company. There
have various mandatory provisions in china those cans affect to company like basic information
of employee, location of workplace, remuneration, mandatory social insurance.
The consumer is one of the best element and part of smartphone industry because they
are purchase phone and increase profit margin of company in effective manner. China leads the
way in sales of smartphone (Tse, 2015). The china's consumer protection law regime. It also
examines a various circumstance which gives rise to consumers disputes. The consumer
protection act has main aim to facilitating the development and various operations of a market
economy. The laws say provide best and appropriate quality of products and services to
customers in case of any fraud company will be penalized as per consumer protection act. This is
not good and effective for company to meets their growth factors. This can affect to Xiaomi
company and its new subsidiary in china in negative and ineffective manner. The collection and
use of consumers personal information shells be in proper and necessary agrees between the
parties. Through that company faced various challenges for B2C players. The one of the most the
biggest challenge comes in the of so called professional consumers (van Liemt, 2016).
Individuals which knowing through the fake products as well as resort to claim punitive
compensation by taking support from court system.

On the other side, the china introduce new consumer protection act at the workplace. The
includes various important information (Vovchenko & et.al., 2017). However, legal action about
property and pollution. Those acts are also affected to business and its growth factors in negative
and ineffective manner. If company is pollute more at market and that is affect to environment
then company is affected by that in negative manner.
CONCLUSION
From the above study it had been concluded that the international business management
has very important and effective for proper business management. The project had been based on
a smart phone industry's well reputed company which Xiaomi company. The company has deals
in smartphones and had various subsidiaries at market place. This creates more profitability for
company in the current world. In the industry recently have ample number of current trends
through that company has highly affected because through that needs and wants of customers
had been increased with company. At the time of trade war make difference between US and
China and created trade restriction between both the country. Through that countries has
restricted to done business in together and cross countries. That affected more at that time in
negative manner. This has been creates various problems for company to works with that in
effective manner.
The report had been affected by some legal, political and technological factors and also
related with company at the time of trade war. That has been analysed in business analysis
section like political factor, Due trade war between China and US, any organization cannot be
able to enter into both nations easily, they have to face many difficulties that impact on its
business growth and success within existing market negatively. That had gives negative impact
on company. On the other side, the new subsidiary in China has also affected by increasing rate
of income tax in china. As well as, import and export trade has also affected to company in
negative manner. So political instability in this nation after trade war directly affect business
position negatively. This had been created various negative impacts with that in ineffective
manner.
On the other side, technological factors had been affect to company and its new
subsidiary in china. Due to technological advancement cloud computing demand is growing
more and more which is quite beneficial for business as it is one of the best opportunities to grow
firm. This has been created positive impact and various opportunities for company in effective

manner. This had been more important for business to use those in proper manner. But that can
affect to company new subsidiary because at that have shortage of ecological supply chain. This
creates more negative impacts on the business. This can create negative impact on business at
China's market place because company need to do research on China market by using search
engine technology.
At the end, legal factor has greatly affected to company and its growth factors as well as
their new subsidiary in china because every country have their own rules and regulation as well
as culture. That affected to company and its growth factors in ineffective manner. Profit margins,
product transportation, viability of certain markets is examples of things which get affected by
legal factors. Regulations and rules are leading challenged before any business, obedience is
absolutely important of business profits. Xiaomi is facing some legal issues in their nation, as it
had negative impact on brand as well as its perception on mind of consumers. On the other,
consumer protection act and employment act had been includes various changes in the china.
Those had been affects to company and its new subsidiary at china.